Aecom (NYSE: ACM)

Aecom, together with its subsidiaries, engages in designing, building, financing, and operating infrastructure assets worldwide. The company operates through four segments: Design and Consulting Services, Construction Services, Management Services, and Aecom Capital.

Take a look at the 1-year chart of Aecom (NYSE: ACM) below with my added notations:

ACM had formed a key support at $32 (green) over the past few months. The stock was also declining against a down trending resistance line (red). These two levels combined had ACM stuck within a common chart pattern known as a descending triangle. Eventually, the stock would have to break one of those two levels, and last week ACM broke the support.

The Tale of the Tape: ACM broke the support of a triangle pattern. A short trade could be made on a rally back up to $32. A long trade could be considered if the stock broke back above $32, and the trendline resistance.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT